China’s PP and PE Demand Remains Slow Ahead of Peak Season

China’s PP and PE markets are still waiting for a meaningful recovery in downstream demand, with buying activity remaining weak and uneven across different sectors. Although agricultural demand has shown some early improvement ahead of the traditional peak season, the recovery remains limited and has not yet created a broad increase in polyolefin consumption.

Usually, demand starts improving in August as downstream producers gradually restock before the “Golden September – Silver October” period. Higher activity is normally seen in sectors such as packaging and agricultural film, with stronger operating rates and inventory replenishment supporting PP and PE consumption.

This year, however, the expected seasonal recovery has yet to become clearly visible. The weak performance of the 2025 peak season has also raised concerns that demand growth in 2026 could again fall short of normal seasonal expectations. Ongoing geopolitical uncertainty is adding further caution to the market.

Seasonal Recovery Still Not Clearly Visible

Market players said there has been little evidence of a strong seasonal pickup so far. High feedstock costs have pushed resin prices higher, putting pressure on downstream processing margins and reducing buyers’ willingness to purchase aggressively.

As a result, most buyers continue to procure only according to immediate requirements rather than building inventories. A converter in Dalian reported that demand remained largely unchanged and weak by mid-August, with overall deal activity staying average. Similarly, a trader in Ningbo noted that lower-priced cargoes attracted comparatively better interest, highlighting the market's continued price sensitivity.

Demand from downstream manufacturing also remains insufficient to support a wider increase in consumption. New orders are limited, operating rates have not increased significantly, and large-scale restocking remains absent.

At the same time, uncertainty surrounding the Strait of Hormuz and US-Iran relations has kept crude oil prices relatively high and volatile. This has added to market caution, with many participants preferring to wait for clearer signals before taking larger positions.

Agricultural Sector Provides Limited Support to PE

PE demand has received some modest support from the approaching agricultural film season. A few greenhouse film producers have reportedly received new orders, leading to a slight increase in operating rates.

Market participants in some regions also reported early signs of improving downstream buying as the agricultural season approaches. However, the recovery remains selective, and overall agricultural film demand has not yet reached its seasonal peak.

The agricultural sector could provide additional support to PE consumption in the coming weeks, but the improvement alone may not be sufficient to significantly change the overall market situation.

High resin prices remain another major challenge. Rising feedstock and polyolefin costs continue to squeeze downstream margins, making buyers reluctant to build large inventories even with the peak season approaching. Continued geopolitical risks and volatile crude prices may further encourage a wait-and-see approach and limit pre-season restocking.

While some demand improvement is still expected during the upcoming peak season, it may not be strong enough on its own to create a sustained rally in PP and PE markets. In the near term, market direction is likely to depend on the balance between supply conditions, downstream demand and movements in upstream costs, with feedstock prices and geopolitical developments potentially providing stronger immediate support than seasonal demand.

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